CPM (Cost per Mille)

The cost per mille (CPM), also known as the cost per thousand contacts (CPM), is used in various advertising contexts to assess the profitability of advertisements and enable their billing. The focus is on the quantity of contacts, which makes it particularly suitable for campaigns that aim to increase reach and brand awareness, rather than direct interaction or conversion. Here are some key situations where CPM is used:

1. comparison of ad formats and advertisers: the CPM allows direct comparison of the cost of different ad formats and ad platforms based on reach, regardless of the type of medium or specific targeting of the ad.

2. price variability within a medium: Within a medium, such as a website, the CPM can be used to analyze the price differences between different ad spaces. This can be attributed to factors such as visibility, presumed effectiveness or target group specificity.

3. focus on reach instead of quality: As the CPM mainly considers the number of impressions, it is suitable for campaigns that aim for broad visibility without prioritizing the quality or engagement of the contacts reached. This is particularly relevant for initiatives to increase awareness of a brand or product.

4. areas of application: CPM is widely used in traditional media such as TV, radio and print, as well as online advertising, including the placement of banner ads. This illustrates its flexibility and importance as a billing model across different advertising channels.

5. dependence on the success of other factors: Although CPM is a useful tool for evaluating and billing advertising campaigns, the actual success of an ad depends on several other factors. These include the quality of the ad design, the offer itself and the accuracy of the target group.

Advantages of CPM

1. more precise budget control in media planning: the ability to determine advertising costs more precisely according to the number of impressions simplifies the management of the advertising budget.

2. cost comparison across different platforms: This allows the efficiency of advertising measures to be directly evaluated and compared across different media and platforms, including usage across different media channels.

3. promotion of brand awareness and further reach: Ideal for campaigns that aim to reach a wide audience and increase brand visibility.

4. usually more cost-efficient compared to CPC models: Often offers better value for money than models based on cost-per-click, especially when the main objective is to increase visibility.

Disadvantages of CPM

1. focus on expanding reach, not contact quality: the focus is on the number of impressions without considering the quality or engagement of the people reached.

2. lack of insight into the target audience: there is a lack of detailed information about the users who see the advertising, including their demographic characteristics or interests.

3. no direct measurement of ad effectiveness: there is no feedback on how users interact with the ad, which limits the ability to evaluate campaign performance.

CPM is used in a wide variety of advertising environments, whether digital or analog. It includes pricing for TV commercials and radio ads and is often found in online marketing. There, CPM is crucial not only for search engine advertising, but also for AdSense users and Amazon sellers. Even in social networks, the cost-per-mille is used to determine advertising costs.

The type of device, whether mobile or desktop, does not change the application of CPM, although the costs can vary depending on the device type. This is partly due to the different competitive situation between smartphone and desktop users. It is also important to realize that CPM is not the optimal billing method for every platform. The most suitable method depends on the specific campaign and its objectives, with the type of advertising campaign and the objective influencing the choice of billing method.